Below is the information about Rexford Corporation’s direct material cost. Standard price of direct material per ounce $35 per ounce Actual quantity of materials purchased 420 ounces Actual quantity of materials used 400 ounces Standard quantity allowed for actual output 360 ounces Direct material price variance $2,100 Unfavorable What is the actual price paid by Rexford to purchase an ounce of direct material? Group of answer choices $31.5 $35 $30 $40
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Below is the information about Rexford Corporation’s direct material cost.
Standard price of direct material per ounce $35 per ounce
Actual quantity of materials purchased 420 ounces
Actual quantity of materials used 400 ounces
Standard quantity allowed for actual output 360 ounces
Direct material price variance $2,100 Unfavorable
What is the actual price paid by Rexford to purchase an ounce of direct material?
Group of answer choices
$31.5
$35
$30
$40
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